New technologies help save water in US oil industry

Armed with the latest technologies, two U.S. firms are profiting handsomely and expecting rampant growth by reducing the use of millions of gallons of water in oil shale production and cutting carbon dioxide emissions in oil fields.

The water-saving technology, propane gas gel, was patented by energy giant Chevron and commercialized by Gasfrac Energy Services, a Canadian company.

"We've talked to companies all over the world and a few in China who are interested in our technology," said Kyle Ward, marketing director for Gasfrac, which will soon apply the new technology at up to 900 drillable locations owned by Black Brush Oil & Gas LP at Texas's vast Eagle Ford formation.

"Results from our first well with Gasfrac has seen oil production at a sustainable rate weeks earlier than the standard water fracturing, and we are seeing huge savings on disposal of fracturing fluids," said Phil Mezey, Co-CEO of BlackBrush.

The U.S. Environmental Protection Agency (EPA) has not given any comment on the money-saving gel, and other environmental authorities are cautious to endorse a technology that is brand new.

"The basic concept, less water to begin with and less contamination, is a positive development," said Jonathan Scott, Colorado communications director for Clean Water Action, the largest U.S. grass-root environmental group focusing on water, energy and environmental health with more than 1 million members.

The traditional hydraulic fracturing method, or "fracking," required 6million gallons (22,712 tonnes) of water per well, while the new technology would eliminate the use water and clean-up costs.

Widespread use of this new technology could benefit oil and gas fields across the country, especially in New York state where a moratorium was imposed in 2010 after the drilling process was thought to threaten regional water supplies.

Gasfrac first used the technique in commercial setting four years ago and has since fracked over 1,300 wells in Canada. The U.S. contracts could spell explosive growth for the company.

"We've been preparing for this for years," said Ward. "Now we're extremely busy educating and training U.S. companies."

The Gasfrac technology pumps a thick gel made from propane into the ground two miles (3.2 km) deep, as opposed to traditional methods that use a mixture of water, sand, and chemicals to extract natural gas reserves from deep shale formations.

Once injected deep underground, the gel reverts to vapor, and returns to the surface in recoverable form.

The method was originally designed to improve the performance of low-pressure wells, but is particularly appealing today to companies dealing with water shortages in drought-stricken Texas.

While Gasfrac's technology addresses oil shale fracturing beneath ground, a Montana-based company is now capturing carbon dioxide fumes currently being burned off above ground.

Gas to Green (G2G) was formed by career oil man Brian Cebull, whose company installed a miniature-natural gas plant in a trailer that is taken to an oil well to capture, liquefy and store gas emissions.

"We're turning a waste stream into a profit stream," Cebull said, whose company is bracing for rapid growth due to high demand.

For example, North Dakota has 4,377 wells connected to a pipeline, which makes the wells can access the emissions-cut technology, leaving another 1,094 wells waiting to be hooked up, and each week 70 new wells are approved, said Justin Kringstad, director of the North Dakota Pipeline Authority based in Bismarck.

Until the wells are connected to the pipeline, emissions are burned off, a costly waste and a harm to the environment.

North Dakota is flaring 100 million cubic feet of natural gas each day, enough to heat half a million homes for a day, according to a New York Times report last fall.

The flaring releases about 2 million tons of carbon dioxide into the atmosphere each year, equivalent to that released by 384,000 cars and a medium-sized coal-fired power plant.

"Anybody driving through the oil fields who sees the burn offs might say, 'there's a problem here that needs to be fixed,'" Cebull said.

Oil and gas production in Western United States is booming and 150,000 jobs were created in 2011, according to a petroleum industry study.

The new technology can greatly cut down on carbon emissions and effectively protect local environment.

Armed with the latest technologies, two U.S. firms are profiting handsomely and expecting rampant growth by reducing the use of millions of gallons of water in oil shale production and cutting carbon dioxide emissions in oil fields.